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AUD/USD Remains a Sell on Strength after Reversal Follow Through

By , Sr. Technical Strategist
30 October 2013 22:11 GMT

Daily

eliottWaves_aud-usd_body_audusd.png, AUD/USD Remains a Sell on Strength after Reversal Follow Through

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-Last Wednesday’s AUDUSD outside day reversal is consistent with the AUDUSD transitioning from an uptrend to something else (sideways or downtrend). The rally from the August low consists of 2 converging lines (pennant?) and price is below the support line.

-Bigger picture, the advance reversed in the vicinity of the June high (.9791), 2008 high (.9849) and at the channel that originates from the October 2012 low. This is a good place for a top.

-10/23 volume (CME futures) was the highest since 9/18, which was a short term top.

Trading Strategy: Was triggered short at .9505. However, I’m not comfortable being short with NZDUSD at a low for the month and AUDUSD now. A corrective advance may begin from nearby levels (or now) in which case we’ll look to identify a secondary top (former support at .9570 is of interest as resistance but back to .9620 is possible).

LEVELS: .9301 .9390 .9465 | .9515 .9545 .9570

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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30 October 2013 22:11 GMT